Increasing Climate Change Resilience of Maldives through Adaptation in the Tourism Sector

Introduction

Supported by the GEF's Least Developed Countries Fund (LDCF), the project will provide the required regulatory support, technical skills and knowledge to protect the tourism industry from the adverse effects of climate change. The project will establish at least 10 new investment projects to modify operational infrastructure to increase resilience to the impact of climate change and implement 10 community-based adaptation projects between tourism-associated communities and operators. The project will also work to assess the feasibility of market-based risk financing mechanisms, such as weather index-insurance, and ensure that tangible private-sector investments can be leveraged.

Public-private partnerships will demonstrate the adoption of climate-resilient building codes, freshwater collection, distribution and storage, flood-proofing of waste and waste water management systems, protection of coastal ridges and vegetative belts, and diversification of energy services with renewable resources. With tourism making up 30% of GDP and 60% of foreign exchange receipts, enhancing adaption measures for these vulnerable islands is crucial.

Project Details

With more than 30% of GDP and 60% of foreign exchange receipts, tourism is the dominant sector of the Maldivian economy. Tourism operations are intimately connected to a diverse range of value chains which provide goods and services related to agriculture, fisheries, manufacturing, construction, energy, water and waste management. Climate change undermines the resilience, viability and profitability of these value chains both directly and indirectly. Notwithstanding the evident impact of climate-related events on the tourism sector, environmental management systems in the tourism industry are highly self-regulated and their compliance is not properly enforced. Climate change adaptation is not integrated into policy and planning instruments of the tourism sector, which leads to insufficient adoption of climate-smart planning and investment practices. A number of tourism operators still employ water, waste and energy management practices damaging to the natural capacity of the sensitive reef ecosystem to adapt, and render tourism value chains vulnerable to climate-related shocks and stresses.

The tourism industry directly and indirectly accounts for a high portion of government revenues. In December 2004, tourist arrivals reached more than 600,000 within a calendar year. The tourism sector is expected to grow significantly over the next five years with the opening of 53 new resorts and an additional 10,000 beds. Investments in a tourism resort range from US$10 million for an average tourist resort with 200 beds to over US$ 40 million for modern high-end resort. According to the World Travel Awards 2006, the Maldives is the World‘s Leading Dive Destination and Indian Ocean‘s Leading Destination. The sector also provides substantive indirect employment and a range of opportunities in the fields of transport, communications, agriculture, fisheries, construction and manufacturing, and maintains critical economic linkages with remote and highly dispersed inhabited islands.

Climate change-related risks to the tourism sector and its associated value chains are projected to materialize both directly (through physical damages and losses from climate-related hazards, stresses and events) and indirectly (through reduced revenues across all levels of tourism-related value chains). Initial impacts are already being felt on coastal infrastructure, fisheries, water resources, agriculture and human health. IPCC climate projections for the Maldives, including those related to variability and extreme events, indicate increasing likelihood of conditions detrimental to the tourism sector. It is worth re-emphasizing that these consequences will be felt not only by the tourism sector, but also by the individuals, communities, enterprises and entire sectors that are catering to the sector and hence dependent on its resilience. As climatic conditions will impact on the tourist experience and, in extreme situations, on tourists‘ health and safety, the reputation of the country as a tourist destination is substantively challenged by the effects of global warming.

The major climate hazards to which tourism resorts in the Maldives are exposed regularly include windstorms, heavy rainfall, extreme temperatures and draught, sea swells and storm surges. Of these, the intensive risks associated with swell waves, heavy rainfall and windstorms can be especially problematic, due to their high frequency and great potential for physical destruction and erosion. The combined effect of storm surges and tides, or storm tides, are perceived as especially destructive by tourism resorts.

The effects of global warming poses increasing risks on soil and water quality. Groundwater is a scarce resource in the Maldives, due to the hydrogeology of the country. The freshwater aquifer lying beneath resort islands is a shallow lens, 1 to 1.5m below the surface, and no more than a few meters thick. The thickness of the groundwater aquifer in the islands is determined by the size of the island and the permeability of the soil column. Adding to this is the critical determinant of net rainfall recharge, which is becoming more variable in a changing climate. Many freshwater aquifers are already stressed from over-extraction and face the risk of total depletion if dry periods extend. This already precarious hydrological system is further aggravated by climate change-induced effects of sea level rise and flooding during extreme weather events, which increases saltwater intrusion into the freshwater lens. Salinization of groundwater is therefore affecting the quality of life and vegetation on many islands, and tourism resorts are required to expand their natural water supply with desalination technology to meet their needs.

LDCF support will provide the tourism sector in Maldives with the required policy environment, regulatory guidance, technical skills and knowledge to ensure that climate change-related risks can be systematically factored into day-to-day tourism operations. The project will strengthen the capacity of the Ministry of Tourism, Arts and Culture and tourism businesses to recognize evident climate risk issues in tourism operations and adopt appropriate adaptation measures to address them. The project will establish at least 10 new public/private investment partnerships between the Government of Maldives and tourism resorts to showcase the economic and environmental benefits of no-regrets adaptation in tourism operations. In addition, 10 community-based adaptation projects in tourism-associated communities will demonstrate how tourism operators and tourism-dependent communities can cooperate on joint initiatives to reduce common vulnerabilities. These partnerships will demonstrate the adoption of climate-resilient building codes for over- and underwater infrastructure; climate-resilient freshwater collection, distribution and storage; flood-proofing of waste and waste water management systems; protection of coastal ridges and vegetative belts; and diversification of energy services with renewable sources. To cover residual catastrophic risk, the project will develop the capacity of the government and the tourism industry to assess the feasibility of market-based risk financing mechanisms (such as weather index insurance) and ensure that tangible private-sector investments can be leveraged.

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Key Results and Outputs

Primary Objective: Increase adaptive capacity of the tourism sector in Maldives to respond to the impacts of climate change and invest in appropriate, no- regrets adaptation measures

End of Project Targets:

An Addendum to the Maldives National Building Code and its associated compliance documents is developed, disseminated and adopted by all tourism resorts.

At least 10 tourism resorts invest in new climate risk management initiatives which increase their resilience to climate-related risks and reduce economic losses from extreme events

At least 10 tourism- associated communities reduce the vulnerability of their water, waste, energy and infrastructure management systems, based on partnerships, guidance and private sector investment facilitated by the project.

Quarterly Updates

Monitoring and Evaluation

Project Start:

Project Inception Workshop: will be held within the first 2 months of project start with those with assigned roles in the project organization structure, UNDP country office and where appropriate/feasible regional technical policy and programme advisors as well as other stakeholders. The Inception Workshop is crucial to building ownership for the project results and to plan the first year annual work plan.

Daily:

Day to day monitoring of implementation progress: will be the responsibility of the Project Manager, based on the project's Annual Work Plan and its indicators, with overall guidance from the Project Director. The Project Team will inform the UNDP-CO of any delays or difficulties faced during implementation so that the appropriate support or corrective measures can be adopted in a timely and remedial fashion.

Quarterly:

Project Progress Reports (PPR): quarterly reports will be assembled based on the information recorded and monitored in the UNDP Enhanced Results Based Management Platform. Risk analysis will be logged and regularly updated in ATLAS.

Annually:

Annual Project Review/Project Implementation Reports (APR/PIR): This key report is prepared to monitor progress made since project start and in particular for the previous reporting period (30 June to 1 July). The APR/PIR combines both UNDP and GEF reporting requirements.

Periodic Monitoring through Site Visits:

UNDP CO and the UNDP RCU will conduct visits to project sites based on the agreed schedule in the project's Inception Report/Annual Work Plan to assess first hand project progress. Other members of the Project Board may also join these visits. A Field Visit Report/BTOR will be prepared by the CO and UNDP RCU and will be circulated no less than one month after the visit to the project team and Project Board members.

Mid-Term of Project Cycle:

Mid-Term Evaluation: will determine progress being made toward the achievement of outcomes and will identify course correction if needed. It will focus on the effectiveness, efficiency and timeliness of project implementation; will highlight issues requiring decisions and actions; and will present initial lessons learned about project design, implementation and management. Findings of this review will be incorporated as recommendations for enhanced implementation during the final half of the project’s term.

End of Project:

Final Evaluation: will take place three months prior to the final Project Board meeting and will be undertaken in accordance with UNDP and GEF guidance. The final evaluation will focus on the delivery of the project’s results as initially planned (and as corrected after the mid-term evaluation, if any such correction took place). The final evaluation will look at impact and sustainability of results, including the contribution to capacity development and the achievement of global environmental benefits/goals. The Terminal Evaluation should also provide recommendations for follow-up activities.

Project Terminal Report: This comprehensive report will summarize the results achieved (objectives, outcomes, outputs), lessons learned, problems met and areas where results may not have been achieved. It will also lie out recommendations for any further steps that may need to be taken to ensure sustainability and replicability of the project’s results.

Learning and Knowledge Sharing:

Results from the project will be disseminated within and beyond the project intervention zone through existing information sharing networks and forums.

The project will identify and participate, as relevant and appropriate, in scientific, policy-based and/or any other networks, which may be of benefit to project implementation though lessons learned. The project will identify, analyze, and share lessons learned that might be beneficial in the design and implementation of similar future projects.

Finally, there will be a two-way flow of information between this project and other projects of a similar focus.